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SME Initiative Malta TAIEX-Regio Workshop Bucharest 11 th July 2017

SME Initiative Malta TAIEX-Regio Workshop Bucharest 11 th July 2017. Performance Review SME Initiative Malta: overview SME Initiative Malta: absorption as at 31 December 2016 Main events in 2016 Profile of the Final Recipients

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SME Initiative Malta TAIEX-Regio Workshop Bucharest 11 th July 2017

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  1. SME Initiative Malta TAIEX-Regio Workshop Bucharest 11th July 2017

  2. Performance Review • SME Initiative Malta: overview • SME Initiative Malta: absorption as at 31 December 2016 • Main events in 2016 • Profile of the Final Recipients • Processing the information received from Financial Intermediaries • Internal Control Framework • Conclusions

  3. Overview Objectives: As per the Operational Programme, the SME Initiative aims at: • Improving competitiveness of SMEs in Malta by reaching 845 SMEs and achieving a leverage of 4x • Reduce pricing and collateral requirements Financial Instrument: • Uncapped guarantee for a portfolio of new loans to SMEs supporting 75% of the risk of each loan originated by financial intermediaries Purpose of the loan: • Investment in both intangible and tangible investments, working capital, others

  4. Overview (2) • Malta has earmarked EUR 15m of ERDF resources for this initiative. • EIB Group has committed EUR 32m, the EC through H2020 EUR 0.23m • The Financial Intermediary has committed EUR 31.77m Financial Intermediaries are contractually committed to achieve a leverage effect of 4x with respect to ERDF resources.

  5. 2017 Main Events in 2016 Allocation to Financial Intermediaries July January September July Signature of the Funding Agreement

  6. Overview (3) Guarantee EUR 61m available for SMEs Loan to SMEs Risk takers Guarantee FEI FinancialIntermediaries Enhancing the competitiveness of SMEs in Malta: 845 SMEs Financial Intermediary Risk (25%) DESIRED IMPACT Financial Intermediary Risk (25%) SME Initiative risk (75%) ERDF 15 m EUR 15m of ERDF resources will potentially generate EUR 61m of financing to SMEs

  7. Absorption as at 31st Dec 2016 Of which 35 SMEs in Gozo Of which EUR4m in Gozo 259 SMEs reached EUR 31.6m Loans committed EUR 13.5m ERDF allocated to guarantee agreements 50% of the portfolio has been generated as at 31 December 2016

  8. Absorption as at 31st March 2017 320 SMEs reached EUR 38.4m Loans committed EUR 13.5m ERDF allocated to guarantee agreements In 3 months, 61 SMEs were included in the portfolio of loans and additional financing of approx. EUR 7m was committed

  9. Evolution of absorption Absorption higher by 33% Actual absorption rate (67%) is well above the expected absorption (34%), EUR 20m more than expected

  10. Evolution of absorption The portfolio should be fully built up by the second semester of 2018 with 1.5 year of advance

  11. Profile of final recipients Who is benefiting? (end 2016)

  12. Profile of final recipients (2) Who is benefiting? (end 2016)

  13. Profile of final recipients (3) Sectors receiving financing (end 2016) DIVERSIFICATION BY SECTOR • 17 sectors received financing(NACE code level 1) • 4 sectors account for approx. 70% of SMEs receiving financing More than 55% of the financing reached SMEs of the retail and hospitality sectors

  14. Profile of final recipients (4) Loan Purpose (end 2016)

  15. Processing the information received from FIs

  16. Control Framework

  17. Conclusions • Full allocation of ERDF resources to guarantee agreements with 2 financial intermediaries, the first signature took place 6 months after the signature of the funding agreement and a second operational agreement was signed 14 months after the signature of the Funding Agreement. • Absorptionis going well as at May 2017, 66.9% of the resources were committed by the banks to SMEs (67% for Bank of Valletta and 63% for BANIF). • Financing is reaching SMEs from different sectors and generating a great support to financing tangible assets of SMEs while reducing the level of collateral required by banks. However the size of the loan is higher than expected. Successful implementation of the financial instrument with full allocation of resources and the progress of implementation shows a strong market appetite for even more operations…

  18. ContactDetails • Planning and Priorities Co-ordination Division, • Triq il-Kukkanja, • Santa Venera • Tel: + 356 22001142 • Fax: + 356 22001141 • Email: info.eufunds@gov.mt • Website: www.eufunds.gov.mt

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